Lenovo Releases Q3 2013 Results, Reports SMB Growth

Lenovo recently announced the results of its third fiscal quarter, which ended December 31, 2013. Harry and I were actually able to speak to Lenovo’s ‎Vice President North America Commercial Channels and SMB, Chris Frey, bright and early this morning, and he gave us the rundown on the record-setting quarter for the company and what it meant for the SMB Channel.

Chris began by letting us know that Lenovo sold an average of 5 devices per second in Q3 2013. Chris then went into more detail by letting us know that the company sold 15 million PCs and 17 million devices total in Q3 2013, an overall balanced sales result. For clarification purposes, Lenovo includes clamshell, convertible and detractable products, like the Yoga, as “PCs.” Basically, if it ships with a keyboard attached, it’s a PC. “Devices” then include standalone tablets and “smart-connected devices,” such as phones and TVs.

This amounted to$10.8 billion revenue for the quarter, which is a 15% increase year-over-year for the company. In fact, Lenovo numbered as the largest PC Vendor, earning an 18.5% market share, which is a 2.4 increase year-over-year. Chris Frey explained to Harry and me that this growth was driven by a number of factors, including the core notebook strategy, commercial desktops, servers and a new focus on the SMB Advantage Partner Program. The commercial desktop growth in particular was interesting to us, and Chris explained that products like the Lenovo Tiny are meeting the demand for desktops in the workplace. The Tiny, as its name suggests, has a small form factor, and is good for use in hospitals, call centers, or anywhere space is at a premium.

On the SMB side, Chris let us know that the Lenovo SMB Channel saw a 30% growth rate, and outperformed the rest of the market. According to Chris, this was primarily due to a refresh of the SMB Advantage Partner Program.

“Not every partner looks alike,” said Chris Frey in an interview this morning. “We really worked to increase the VAR coverage inside and out in our Partner Progam, and to customize a program to fit our resellers’ unique needs.”

To do this, Lenovo updated their SMB Advantage Program to pay resellers both for leads and for recommending Lenovo products. This went hand-in-hand with a training initiative to ensure partners had all of the information they needed to sell Lenovo solutions. In addition, Lenovo added a 60-day term for payment, allowing partners to keep their money for longer than they normally would. This has resulted in a 40% increase in partners leveraging the 60-day terms. Harry asked Chris if resellers from D&H would be able to access this finance option, and he explained that this was possible, and that the program was fairly seamless.

Finally, we were able to speak with Chris Frey about Lenovo’s two major still-in-progress acquisitions of IBM Server and Motorola. On the IBM side, Chris explained that once the acquisition is complete, Lenovo will be poised as the third largest x86 player worldwide. The two acquisitions are expected to take 6-9 months to complete.

We’d like to take a moment to thank Chris Frey for meeting with us this morning!